MACRO ENVIRONMENT

OFSOUTH AFRICA

MAP OF SOUTH AFRICA

SOUTH AFRICA'S POPULATION

South Africa is a nation of diversity, with nearly 52-million people and a wide variety of cultures, languages and religious beliefs.

According to Census 2011, the country's population stands at 51.77-million, up from the census 2001 count of 44.8-million.

Africans are in the majority, making up 79.2% of the population;

Colored and white people each make up 8.9% of the total; and the Indian/Asian population 2.5%.

"Other" population group makes up 0.5% of the total.

PEOPLE OF SOUTH AFRICA

POPULATION GROUPS

The African population is made up of four broad groupings: The Nguni, comprising the Zulu, Xhosa, Ndebele and Swazi people The Sotho-Tswana, who include the Southern, Northern and Western

Sotho (Tswana people) The Tsonga The Venda White South Africans include: Afrikaners, descendants of Dutch, German and French Huguenot who

came to the country from the 17th century onwards. English-speakers, descendants of settlers from the British Isles who came

to the country from the late 18th century onwards. Immigrants and descendents of immigrants from the rest of Europe,

including Greeks, Portuguese, Eastern European Jews, Hungarians and Germans.

CULTURE

DEMOGRAPHICS

The population grew by 1.4% in 000 to reach 4.6 million. Birth rate = 18.87 births/1,000 population (00 est.) Age : 0-14 years 0% (male 6,460,7; female 6,77,00) 15-64 years 65% (male 1,807,; female 1,70,088) 65 years and over 5% (male 864,441; female 1,88,864) (00

est.) Gender - In 001, females accounted for 51.50% of the

population in South Africa, while the male population represented 48.50% of the population. South Africa has the same ratio as the UK, and it is close to most Western European countries. However, comparisons differ when the population aged over 60 is considered.

POLITICAL ENVIRONMENT

Stable political environment Rule of law is respected and upheld Many countries don’t have this benefit Corruption may drive marketing

succes/failure

TECHNOLOGICAL infrastructure SA has some of the best transport infrastructure in

the world, placed in the top 20 countries for number of airports, length of rail and length of roads1. In the past four years $6.95bn was invested into improving infrastructure.

In the next three years capital investment is planned to be $7.52bn to increase capacity for the 2010 World Cup.2 56% of funding in 2009 was used to expand current operations and the remainder was used to upgrade existing infrastructure.

Implication: Improving transportation provides potential employees locally, nationally or internationally with reliable and convenient means of transport to the company’s location..

ECONOMICAL

Corporate Tax Rate There is a basic corporate tax rate of 30.2%

of profit for all companies as of 2010. Interest Rates The South African Reserve Bank is

independent and operates in much the same way as Western central banks, influencing interest rates and controlling liquidity through its interest rates on funds provided to private sector banks.

LACK OF SKILLED LABOR

More commonly, educated workers are deciding to move abroad, contributing to the rising brain drain and lack of skilled labour.

Although there is a net emigration of -0.13 migrant(s)/1,000 population (2009 est.)

This is due to the an increasing flow of unskilled labour from neighbouring countries in search of better economic opportunities and does not contribute to the necessary labour force required for the growth of the nation.

RISE OF THE INFORMAL SECTOR IN RSA

Macro Factors Exclusive, discriminatory laws e.g. Group Areas Act, Job

Reservation Act, Education policies Political Reaction .. Unrest in 1986; stay aways, boycott of

white-owned businesses, withdrawal of traditional retailers from” black areas”, disenchantment with white owned businesses (no opportunities) Lot of red tape to start a formal business

Limited access to capital and credit High unemployment Massive urbanization as influx laws are scrapped Limited education opportunities

SPECIAL TAXES

The macro-economic policy adopted by the South African Government in 16 demonstrated its commitment to open markets,

privatisation and a favourable investment climate, moving away from the former governments strategy of import substitution and industrial development that protected local industries with high tariff barriers. 

Since 15/6, South Africa has reformed and simplified a complex tariff structure, reduced its average tariff rate considerably and terminated most import controls and trade restrictive practices. 

PRINCIPAL INDUSTRIES

Mining, automobile assembly, metalworking, machinery, textile, iron and steel, chemicals, fertilizer, foodstuffs 

Tourism - Within five years, tourism’s contribution to the economy will outstrip that of mining. The government, which sees the sector as a great way to create jobs and woo foreign currency, has launched an intensive marketing campaign and tourism skills development project. 

Mining - Mining accounts for only 6% of GDP, but gold exports provide one-fifth of South Africa’s foreign exchange reserves. The country also produces 75% of the world’s platinum, an important component in cars’ catalytic converters. South Africa’s global role in mining also continues to grow. 

· Manufacturing and cars - Manufacturing is the largest contributor to GDP, at 18%. It is dominated by engineering and metal products but food and tobacco processing remain important. Manufacturing output has revived in the last six months, helped by stronger exports to Europe and Asia, as well as a modest upturn in domestic demand. 

PERCENT FOREIGN INVESTMENT/INDUSTRY

 South Africa’s reputation as an emerging market suffers from its proximity to the instability and conflicts that have appeared in neighboring countries.

The 000-00 land invasions in Zimbabwe and the controversial Zimbabwean election in March 00 had a negative impact on the value of the Rand and on South Africas ability to attract foreign investment. 

ENERGY

The energy situation has much to improve with state-owned firm, Eskom, struggling to meet the demand caused by the “post-apartheid economic boom”5. The industrial sector uses 68% of the supply but it is estimated that savings of up to 60% can be made with low-cost investment6. Alternative means of energy are currently being looked into and Nuclear Power plants have been proposed and could be in place by 2020 if approved.7

Implication: Electricity supply is currently inconsistent but demand side management and planned expansion in the future should solve any problems.

INFRASTRUCTURE 

Fiscal consolidation over the past five years has afforded government the opportunity to deepen

its commitment to redistribution, allowing consumers significant tax relief, encouraging investment by the private sector and placing a renewed focus on physical infrastructure

development. 

capital spending is budgeted to grow by 18.1 percent a year over the next three years,

including strong investment in both social infrastructure - such as schools, hospitals and housing - and provision for investment in roads, water services, rail infrastructure and other economic assets. 

INFLATION RATES

As a result of the Rands performance and also because of a rise in international oil prices, inflation began to accelerate in December 001. South African inflation had declined considerably in recent years.

However, due to new inflationary pressures, the South African Reserve Bank was only just able to bring the rate within the target range for 001 of between and 6 percent. In the year 000 the inflation rate was 5.%. 

EXPORTS AND IMPORTS

Principal export commodities included gold, diamonds, platinum, other metals and minerals, machinery and equipment (18 est.) · In 2010 the world total import market was 6.5 billion US dollars, South Africa had an import value of . million wand was ranked 40 in the world based on this share.

Principal import commodities included machinery and equipment, chemicals, petroleum products, scientific instruments, foodstuffs (2010 est.)

REFERENCES

1.http://persuasivetopicsforpaper.blogspot.in/2012/07/analysis-of-macro-environment-of-south.html

2.www.wikipedia.com3. 

http://www.ukessays.com/essays/economics/the-current-macro-environment-of-south-africa-economics-essay.php#ixzz3KTLPL7aZ

videohttps://www.youtube.com/watch?v=BI8xVpzfVUg

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